Haley R
DIS Legend
- Joined
- Sep 3, 2017
- Messages
- 20,680
Definitely not our forever home. Just a starter house. We’ve been in it for 2 years and dh’s job is a little up in the air right now. There’s a slight possibility we will move next year but nothing has been decided yet. He said he crunched the numbers on the biweekly payments and it didn’t make sense for us. I’m not really sure because I haven’t looked into it at all. He does a lot of our finances but I trust him. I’m sure he has a good reasonUsually there is no penalty for paying extra on your principal. But you guys are so young - is this your forever home? If it is a starter home and you expect to move up in 5 years, I wouldn't put extra into it. There are lots of ways to shorten a mortgage. Making an extra payment yearly has always been a popular option and can reduce a 30 year loan considerably.
But, I think your hubby has it backwards: usually the shorter the loan term, the lower the interest rate, and in addition, making 26 biweekly payments as opposed to making 12 monthly ones should shorten the loan term. If you can handle the payment, both are a win-win for someone trying to get rid of their mortgage.
I think most lenders initially play it safe by negotiating a loan amount with new buyers that is well within their ability to pay.
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